Disqualified, one must accept fine (5)
I believe the answer is:
unfit
'disqualified' is the definition.
(thesaurus)
'one must accept fine' is the wordplay.
'one' becomes 'unit' (synonyms).
'must accept' means one lot of letters goes inside another.
'fine' becomes 'f' (abbreviation).
'unit' going around 'f' is 'UNFIT'.
(Other definitions for unfit that I've seen before include "Not in good physical condition, or not suitable" , "Not in good shape physically" , "not worthy" , "Inapt" , "In poor condition" .)